nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2022‒05‒16
six papers chosen by

  1. Corporate governance mechanisms and financial reporting quality of commercial banks in Nigeria By Sunday Ogbeide; Henry Ogiugo; Isaac Adesuyi
  2. Impact of GHG Reporting Quality on Investors’ Valuations in a Regulatory Context: The Case of SBF 120 Companies By Emmanuelle Fromont; Thi Le Hoa Vo; Gulliver Lux
  3. Assessment and analysis of accounting and finance apps in start-ups in Germany: an explorative study By Salvy Goel, Salvy; Berrones-Flemmig, Claudia Nelly
  4. A Balance-Sheet Model of Fiscal Policy in Namibia By Federico Sturzenegger; Nicolás Der Meguerditchian
  5. "Why the Feldstein-Horioka "Puzzle" Remains Unsolved" By Jesus Felipe; Scott Fullwiler; Al-Habbyel Yusoph
  6. The Effects of Corporate Governance on ESG-related Information Disclosure: Evidence from Japanese Firms By Tatsuya Kato

  1. By: Sunday Ogbeide (Elizade University); Henry Ogiugo (Ajayi Crowther University); Isaac Adesuyi (Elizade University)
    Abstract: This study examined corporate governance mechanisms and financial reporting quality of listed commercial banks in Nigeria. The population of the study consists of all listed commercial banks on the stock exchange as at 31 st December 2018. A sample of nine (9) listed commercial banks were selected and data were collected over the period 2008 to 2018. Descriptive statistics and panel Least Square regression were used for the data analysis. The findings reveal that board size and audit committee were negative and exerted significant impact on financial reporting quality of listed commercial banks while board independence is significant and exerts a positive influence on financial reporting quality of listed commercial banks in Nigeria. Female directorship does not have a significant relationship with financial reporting quality of listed commercial banks in Nigeria. The study therefore recommends that steps should be taken by regulators to stipulate stiffer penalty on firms engaging in earnings smoothing capable of undermining corporate governance ethics and framework for banks in Nigeria as this will serve as deterrent to others and further entrench sanity.
    Keywords: Board Size,Board Independence,Female Directorship,Audit Committee Size,financial Reporting Quality
    Date: 2021–03–30
  2. By: Emmanuelle Fromont (CREM - Centre de recherche en économie et management - CNRS - Centre National de la Recherche Scientifique - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - UNICAEN - Université de Caen Normandie - NU - Normandie Université); Thi Le Hoa Vo (CREM - Centre de recherche en économie et management - CNRS - Centre National de la Recherche Scientifique - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - UNICAEN - Université de Caen Normandie - NU - Normandie Université); Gulliver Lux (CINBIOSE - UQUAM - UQAM - Université du Québec à Montréal = University of Québec in Montréal, UQAM - Université du Québec à Montréal = University of Québec in Montréal, ESG - Ecole des Sciences de la Gestion - UQAM - Université du Québec à Montréal = University of Québec in Montréal)
    Abstract: This article studies the impact of the quality of mandatory corporate reporting of greenhouse gas (GHG) emissions on investors' valuations in a context of increasing legislative constraints and stakeholders' growing information requirements. Using a GHG reporting score estimated from disclosures provided by French companies listed on the SBF 120 from 2016 to 2019, we show that the quality of mandatory GHG reporting improved over the study period despite lack of enforcement measures and appears to be higher among firms in polluting sectors. Our results also suggest that while financial markets are sensitive to the quality of GHG information required under French legislation, they tend to calibrate their valuations of this extra-financial information to the type of sector in which firm operates.
    Abstract: Cet article étudie l'impact de la qualité de la communication réglementée des entreprises en matière d'émissions de Gaz à Effet de Serre (GES) sur la valorisation des investisseurs et ceci dans un contexte de renforcement des contraintes législatives et de croissance des exigences informationnelles des parties prenantes. En utilisant un score de communication GES estimé à partir des publications réalisées entre 2016 et 2019 par les entreprises françaises du SBF 120, nous montrons que la qualité des communications GES réglementées s'est améliorée sur la période d'étude malgré l'absence de mesures coercitives et apparaît particulièrement plus élevée chez les entreprises des secteurs polluants. Nos résultats suggèrent également que si les marchés financiers sont sensibles à la qualité des informations GES exigée par le législateur français, ils tendent à valoriser différemment cette information extra-financière en fonction du secteur d'activité de l'entreprise.
    Keywords: Environmental reporting,quality of GHG information,regulation,investors’ valuations,sector,Reporting environnemental,qualité de l’information GES,réglementation,valorisation des investisseurs,secteur d’activité
    Date: 2022–01–13
  3. By: Salvy Goel, Salvy; Berrones-Flemmig, Claudia Nelly
    Abstract: Small and medium-sized enterprises face several challenges mainly related with lack of access to Finance frequently due to a lack of formal Accounting system and financial management, which leads to weaknesses in their internal financial capabilities. Moreover, from the supply side traditional financial institutions have failed to fulfil the needs of SMEs and presently FinTechs have developed innovative ways to increase the financial literacy in SMEs and to facilitate financing for SMEs (Imanbaeva et al., 2017). This study aims to assess and analyze one of these innovative financial instruments in an explorative way: some relevant Accounting and Finance applications present in the market, based on criteria decided by exploring the scientific literature and evaluating it by interviewing Accounting professionals working in start-ups in Germany. The results show that Zoho Books and Xero turned out to be better than the others in the services provided by them and they received the best ratings and feedback. Their best features are their user friendliness, the integrations offered by them, the diversity of the financial reports that they offer and amount of automation they offer to perform the everyday tasks. The most important factor when choosing an Accounting system is assessing the needs and requirements of the business and then to select the software that best suits the needs. Therefore, this research can be also helpful for small and medium business owners who do not have much idea about the financial aspects and need help with choosing the right accounting software for their business, based on the experience and perspectives of the interviewing Accounting professionals. It can act as a guide for them to understand which factors they should take into account while making their decision and the feedback from the participants can help them while choosing among the five software analysed during this research.
    Keywords: SME Finance,Fintech,Accounting and Finance apps,innovative financial instruments,start-ups,Germany
    JEL: M O
    Date: 2022
  4. By: Federico Sturzenegger (Universidad de San Andrés/Harvard Kennedy School); Nicolás Der Meguerditchian (Universidad de San Andrés)
    Abstract: The issue of debt sustainability has been the focus of continued theoretical and practical interest over the years. In emerging markets, much of the debate has focused on explicit government liabilities, which, while relevant, only represents a small share of government´s liabilities. In contrast the balance-sheet approach estimates all government assets (the most important being the net present value of taxes) and liabilities (the most important being the net present value of expenditures) to compute the government´s net worth. In this paper we apply this methodology to study fiscal sustainability in Namibia. We find that, currently, the Namibian government´s net worth is tilted sharply to the left. We simulate the impact of two types of shocks, a depreciation of the real exchange rate and an additional GDP growth, and find that both produce a further deterioration of the government's balance sheet. Finally, we ask about what type of policies would allow the government to recover the fiscal sustainability and show that, for example, a partial freeze in public salaries allows to recover fiscal sustainability very quickly.
    Date: 2022–04
  5. By: Jesus Felipe; Scott Fullwiler; Al-Habbyel Yusoph
    Abstract: This paper argues that the 40-year-old Feldstein-Horioka "puzzle" (i.e., that in a regression of the domestic investment rate on the domestic saving rate, the estimated coefficient is significantly larger than what would be expected in a world characterized by high capital mobility) should have never been labeled as such. First, we show that the investment and saving series typically used in empirical exercises to test the Feldstein-Horioka thesis are not appropriate for testing capital mobility. Second, and complementary to the first point, we show that the Feldstein-Horioka regression is not a model in the econometric sense, i.e., an equation with a proper error term (a random variable). The reason is that by adding the capital account to their regression, one gets the accounting identity that relates the capital account, domestic investment, and domestic saving. This implies that the estimate of the coefficient of the saving rate in the Feldstein-Horioka regression can be thought of as a biased estimate of the same coefficient in the accounting identity, where it has a value of one. Since the omitted variable is known, we call it "pseudo bias."" Given that this (pseudo) bias is known to be negative and less than one in absolute terms, it should come as no surprise that the Feldstein-Horioka regression yields a coefficient between zero and one.
    Keywords: Accounting Identity; Feldstein-Horioka Paradox; Investment; Pseudo Bias; Saving
    JEL: E01 F21 F32 F36 F41 G15
    Date: 2022–04
  6. By: Tatsuya Kato (Deputy Director and Economist, Institute for Monetary and Economic Studies, Bank of Japan @ (E-mail:
    Abstract: Given the voluntary nature of environmental, social, and governance (ESG)-related information disclosure in Japan, we use a sample of TOPIX firms from 2011 to 2019 to examine the relevance of internal and external corporate governance factors and ESG-related information disclosure for Japanese firms. For the internal governance factors, the results of the logistic regression analysis show that variables such as board independence and board activity significantly influence a company's ESG disclosure strategy, whereas the results of the generalized additive 2 model show that the internal governance variables are relatively less important than the external governance variables such as share ownership structure. For the external governance factors, the logistic regression results show that all the explanatory variables are significant. Although the results from the generalized additive 2 model are generally similar, non-linear relationships for institutional ownership and the Government Pension Investment Fund (GPIF) are also found. These empirical results suggest that the development of corporate governance frameworks such as Japan's Stewardship Code and Corporate Governance Code influences firms' ESG disclosure strategy and encourages them to disclose ESG-related information. This study provides new insights into the relationship between corporate governance and ESG- related information disclosure practices in Japanese firms.
    Keywords: ESG, Corporate Governance, GRI Standards, Disclosure, Machine Learning, GA2M
    JEL: M41
    Date: 2022–04

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.